page_title: Insurance
section_title: Liability
hierarchical_section_title: Insurance / Types / Liability
caption_attribution_description: English: Sign of the times - Foreclosure
context_page_description: Insurance is a means of protection from financial loss. It is a form of risk management, primarily used to hedge against the risk of a contingent or uncertain loss.
  An entity which provides insurance is known as an insurer, insurance company, insurance carrier or underwriter. A person or entity who buys insurance is known as an insured or as a policyholder. The insurance transaction involves the insured assuming a guaranteed and known relatively small loss in the form of payment to the insurer in exchange for the insurer's promise to compensate the insured in the event of a covered loss. The loss may or may not be financial, but it must be reducible to financial terms, and usually involves something in which the insured has an insurable interest established by ownership, possession, or pre-existing relationship.
  The insured receives a contract, called the insurance policy, which details the conditions and circumstances under which the insurer will compensate the insured. The amount of money charged by the insurer to the policyholder for the coverage set forth in the insurance policy is called the premium.
context_section_description: Liability insurance is a very broad superset that covers legal claims against the insured. Many types of insurance include an aspect of liability coverage. For example, a homeowner's insurance policy will normally include liability coverage which protects the insured in the event of a claim brought by someone who slips and falls on the property; automobile insurance also includes an aspect of liability insurance that indemnifies against the harm that a crashing car can cause to others' lives, health, or property. The protection offered by a liability insurance policy is twofold: a legal defense in the event of a lawsuit commenced against the policyholder and indemnification (payment on behalf of the insured) with respect to a settlement or court verdict. Liability policies typically cover only the negligence of the insured, and will not apply to results of wilful or intentional acts by the insured.
  Public liability insurance or general liability insurance covers a business or organization against claims should its operations injure a member of the public or damage their property in some way.
  Directors and officers liability insurance (D&O) protects an organization (usually a corporation) from costs associated with litigation resulting from errors made by directors and officers for which they are liable.
  Environmental liability or environmental impairment insurance protects the insured from bodily injury, property damage and cleanup costs as a result of the dispersal, release or escape of pollutants.
  Errors and omissions insurance (E&O) is business liability insurance for professionals such as insurance agents, real estate agents and brokers, architects, third-party administrators (TPAs) and other business professionals.
  Prize indemnity insurance protects the insured from giving away a large prize at a specific event. Examples would include offering prizes to contestants who can make a half-court shot at a basketball game, or a hole-in-one at a golf tournament.
  Professional liability insurance, also called professional indemnity insurance (PI), protects insured professionals such as architectural corporations and medical practitioners against potential negligence claims made by their patients/clients.  Professional liability insurance may take on different names depending on the profession.  For example, professional liability insurance in reference to the medical profession may be called medical malpractice insurance.
  Often a commercial insured's liability insurance program consists of several layers.  The first layer of insurance generally consists of primary insurance, which provides first dollar indemnity for judgments and settlements up to the limits of liability of the primary policy.  Generally, primary insurance is subject to a deductible and obligates the insured to defend the insured against lawsuits, which is normally accomplished by assigning counsel to defend the insured.  In many instances, a commercial insured may elect to self-insure.  Above the primary insurance or self-insured retention, the insured may have one or more layers of excess insurance to provide coverage additional limits of indemnity protection. There are a variety of types of excess insurance, including "stand-alone" excess policies (policies that contain their own terms, conditions, and exclusions), "follow form" excess insurance (policies that follow the terms of the underlying policy except as specifically provided), and "umbrella" insurance policies (excess insurance that in some circumstances could provide coverage that is broader than the underlying insurance).
caption: The subprime mortgage crisis was the source of many liability insurance losses
exif: {"Image Make": "Panasonic", "Image Model": "DMC-TZ5", "Image Orientation": "Horizontal (normal)", "Image XResolution": "180", "Image YResolution": "180", "Image ResolutionUnit": "Pixels/Inch", "Image Software": "Ver.1.0", "Image DateTime": "2008:05:31 08:46:56", "Image YCbCrPositioning": "Co-sited", "Image ExifOffset": "494", "Image PrintIM": "[80, 114, 105, 110, 116, 73, 77, 0, 48, 50, 53, 48, 0, 0, 14, 0, 1, 0, 22, 0, ... ]", "Image Tag 0xC6D2": "[0, 0, 0, 0, 0, 0, 0, 0, 0, 0, 0, 0, 0, 0, 0, 0, 0, 0, 0, 0, ... ]", "Thumbnail Compression": "JPEG (old-style)", "Thumbnail Orientation": "Horizontal (normal)", "Thumbnail XResolution": "180", "Thumbnail YResolution": "180", "Thumbnail ResolutionUnit": "Pixels/Inch", "Thumbnail JPEGInterchangeFormat": "10132", "Thumbnail JPEGInterchangeFormatLength": "8199", "Thumbnail YCbCrPositioning": "Co-sited", "EXIF ExposureTime": "1/1000", "EXIF FNumber": "33/10", "EXIF ExposureProgram": "Program Normal", "EXIF ISOSpeedRatings": "100", "EXIF ExifVersion": "0221", "EXIF DateTimeOriginal": "2008:05:31 08:46:56", "EXIF DateTimeDigitized": "2008:05:31 08:46:56", "EXIF ComponentsConfiguration": "YCbCr", "EXIF CompressedBitsPerPixel": "4", "EXIF ExposureBiasValue": "0", "EXIF MaxApertureValue": "86/25", "EXIF MeteringMode": "Pattern", "EXIF LightSource": "Unknown", "EXIF Flash": "Flash did not fire, compulsory flash mode", "EXIF FocalLength": "47/10", "EXIF FlashPixVersion": "0100", "EXIF ColorSpace": "sRGB", "EXIF ExifImageWidth": "3456", "EXIF ExifImageLength": "2592", "Interoperability InteroperabilityIndex": "R98", "Interoperability InteroperabilityVersion": "[48, 49, 48, 48]", "EXIF InteroperabilityOffset": "9968", "EXIF SensingMethod": "One-chip color area", "EXIF FileSource": "Digital Camera", "EXIF SceneType": "Directly Photographed", "EXIF CustomRendered": "Normal", "EXIF ExposureMode": "Auto Exposure", "EXIF WhiteBalance": "Auto", "EXIF DigitalZoomRatio": "0", "EXIF FocalLengthIn35mmFilm": "28", "EXIF SceneCaptureType": "Standard", "EXIF GainControl": "None", "EXIF Contrast": "Normal", "EXIF Saturation": "Normal", "EXIF Sharpness": "Normal"}